If you were hoping energy bills would return to normal by 2026, you are not alone. Millions of UK households expected prices to fall back to pre-crisis levels after the turmoil of 2022 and 2023. Yet as of April 2026, the average dual-fuel household is still paying £1,756 per year — significantly more than the roughly £1,100 we were paying before the crisis began.
So what is keeping prices so stubbornly high? And more importantly, what can you actually do about it?
How the Ofgem Price Cap Works
The Ofgem energy price cap is the maximum amount suppliers can charge per unit of gas and electricity on standard variable tariffs. It is reviewed every quarter and is based on the wholesale cost of energy, network charges, supplier operating costs, and policy costs.
As of April 2026, the price cap sets electricity at 24.67p per kWh and gas at 5.74p per kWh. The £1,756 figure assumes typical consumption of 2,700 kWh of electricity and 11,500 kWh of gas per year. If your home uses more, you pay more — the cap limits the rate, not your total bill.
It is a common misconception that the price cap protects households from high bills. In reality, it only prevents suppliers from charging above a certain unit rate. Your actual bill depends entirely on how much energy your home consumes.
Why Are Wholesale Gas Prices Still Elevated?
The single biggest factor in high bills is the wholesale price of natural gas. Before the crisis, the UK was heavily reliant on imported gas from European markets, which in turn were supplied by Russian pipeline gas. When Russia invaded Ukraine in 2022, gas supplies to Europe were drastically cut.
Although the immediate supply shock has eased, several factors keep wholesale gas prices above pre-crisis levels:
- Reduced Russian supply: Europe has permanently pivoted away from Russian gas, relying instead on more expensive liquefied natural gas (LNG) from the US, Qatar, and elsewhere.
- Global LNG competition: The UK now competes with Asian markets for the same LNG cargoes, keeping prices higher than historical norms.
- Depleted storage: European gas storage cycles are tighter, adding a risk premium to prices.
- Geopolitical uncertainty: Ongoing conflicts and trade tensions continue to create volatility in global energy markets.
While wholesale prices are well below the extreme peaks of 2022, they remain around 50–70% higher than the 2015–2020 average. This flows directly into your energy bill.
Why Does Gas Set the Electricity Price?
One of the most frustrating aspects of UK energy pricing is that even though renewable energy is now the cheapest form of electricity generation, your electricity bill is still tied to the cost of gas.
This is because of the marginal pricing system. In the wholesale electricity market, all generators receive the price set by the most expensive generator needed to meet demand at any given moment. Because gas-fired power stations are still called on during peak demand, gas effectively sets the wholesale electricity price for everyone — including wind and solar.
The government has discussed reforming this system, but progress has been slow. Until the market is restructured, cheap renewable electricity will not translate into lower bills as quickly as it should.
Standing Charges Keep Rising
Even if you cut your energy consumption to zero, you would still pay standing charges — the daily fixed fee for being connected to the gas and electricity networks. As of April 2026, standing charges are around 61p per day for electricity and 32p per day for gas. That adds up to roughly £340 per year before you use a single unit of energy.
Standing charges have increased significantly since 2021, partly to cover the cost of failed energy suppliers during the crisis (whose customers and debts were absorbed by surviving companies), and partly to fund network upgrades needed for the green transition.
Environmental and Policy Levies
A portion of every energy bill goes towards funding government policy commitments, including:
- The ECO4 scheme, which funds free insulation and heating upgrades for low-income households
- The Warm Home Discount, which provides bill rebates to vulnerable customers
- Network investment to support the transition to renewable energy and electric heating
These levies are important for decarbonisation and fuel poverty reduction, but they do add to the cost of every unit of energy you use.
Why Bills Have Not Returned to Pre-Crisis Levels
In summary, there is no single villain. UK energy bills remain high in 2026 because of a combination of structurally higher gas prices, a market design that ties electricity costs to gas, rising standing charges, and policy costs. The pre-crisis era of £1,100 annual bills relied on cheap Russian pipeline gas — a source that is not coming back.
The honest truth is that energy bills are unlikely to return to pre-2021 levels in the foreseeable future. The new normal is here, and the most effective response is to reduce how much energy your home needs.
What Can You Do About It?
While you cannot control wholesale markets or government policy, you can take practical steps to protect your household from high energy costs:
- Insulate your home: Loft insulation alone can save £355 per year for a detached house. Cavity wall insulation saves even more.
- Claim free grants: The ECO4 scheme provides up to £15,000 of free insulation and heating upgrades for eligible households — but it ends in December 2026.
- Consider solar panels: Solar panels can save around £584 per year and pay for themselves in 6–8 years.
- Make quick, cheap changes: Simple actions like turning down your boiler flow temperature, draught proofing, and switching to LED bulbs can save hundreds per year.
The energy crisis has changed the economics of home energy efficiency permanently. Measures that once had a 15-year payback now pay for themselves in under 5 years. If there was ever a time to invest in making your home more efficient, it is now.